Here it is, the second round of this awesome series. Today we will keep going in with more seller’s objections and questions and how to answer them in the best way possible. In this installment, you’ll figure out how to close deals sooner and shift your mindset on how important it is to have good open-line communication with your sellers. Lauren Hardy is back with her spells as she gives you actionable tips that will surely be useful in your real estate career. What are you waiting for? Let’s go and jump right in!
How To Overcome Seller Objections With Ease – Part 2 of 3
I see it all the time. You want to build wealth by investing in real estate, but the problem is what you want to do might not match where you live or your lifestyle. The truth is that not all real estate investing strategies work in every market. For most people, it’s only natural that you think you have to invest in your backyard because real estate is such a tangible object. You think you need to be able to touch it.
For that reason, most real estate investors settle on the problems and limitations that their hometown market brings. Guess what? I am here to tell you that you do not need to live where you invest. You can have location and time freedom as a real estate investor. My goal is to dispel those myths and inspire you to think differently about how you invest in real estate by taking a virtual perspective. My motto is, “Live anywhere and invest where you want.” Let’s get started.
Welcome to the Common Seller Objections Series. In this episode, I am going to help you overcome your limited mindset that contracts cannot be signed over the phone. Wholesaling cannot be done virtually. I’m going to help shift your perspective on that. One of the biggest issues, when you want to virtually wholesale is getting over this idea of how to get sellers to sign contracts over the phone.
My best advice to this is you have to be confident when you speak. You have to have a good script and you need to be able to overcome seller objections very well so they trust you enough to sign contracts over the phone. In this episode, we’re going to keep going with more common seller questions or objections and how I like to answer them.
You need to be able to do this because you want to be able to get the seller to trust you and to have faith that you are going to take care of their house selling needs but what’s wrong with your approach is you don’t have the right answers. You’re not able to say them without maybe stuttering or sounding nervous. You also might need a little bit of a perspective or mindset shift.
A lot of people go into virtual wholesaling and the first thing that freaks them out and it’s a mental block is they can’t wrap their head around getting a seller to sign a contract over the phone. You got to get over that idea. I think you will once you start listening to my answers to their objections and questions. You’re going to find this episode super helpful, so let’s get into it.
Seller Objections: You have to be confident when you speak. You have to have a good script and be able to overcome seller objections very well so they trust you enough to sign contracts over the phone.
I’m going to say the seller’s objection or the question and I’m going to go right into what my answer is. Let’s start with number one. This is a common question that comes up. What do you say when a seller says that they want you to remove any language that suggests this contract is assignable? Maybe you have in your contract and/or assign those words or you say this is an assignable contract. What do you do if a seller says, “My attorney says to remove that?”
The first thing I do is I follow that with a question. “Mr. Seller, Mrs. Seller, do you know what that means?” Most of the time, they won’t even know what it means or they don’t even know why their attorney is asking that. I go, “Let me explain a little bit about who we are and what we do.” Remember when we first talked and I told you we’re investors?
They say, “Yeah,” and I go, “Part of what we do, sometimes we buy properties to fix up and flip ourselves as you see on HGTV.” Sometimes we’re buying a property kept as a rental. Sometimes we sell the property to another investor that’s going to do one of those two things. Now, there is a way that we handle that sale when we find another investor.
I’ve been working for years on a huge list of multi-unit investors. People are buying tons of houses every month. Some of these are individuals, sometimes, they’re companies or hedge funds. They rely on people like us to source these deals because they’re not going to do it for themselves. They’re too big but they rely on people like me, expert buyers to say, “I got a deal and it’s in the neighborhood you like. Sometimes I sell my equitable interest in this property to those investors.”
Your benefit as an investor is that you can close on their chosen date.
“Now, there are two ways I could do it. There’s an expensive way and a cheap way. When I do it by assigning my contract, that’s the cheap way and you don’t need to worry about the technicalities of that. Your escrow company is going to know what I’m talking about. When I do it like that, I only have to do one escrow.”
“I only have to pay one set of escrow fees. If I have to close on the property first, then sell it. I have to pay more in fees. In the end, those fees are going to get passed down to you because now I can’t offer you as much money. You want as much money as you can get from this property, right?” They’re going to say, “Right.” “Mr. Seller, Mrs. Seller, if you want me to remove that language, I can but I’m going to need the property for $5,000 less.” Nine times out of ten, they’re going to say, “No, never mind. Don’t worry about it.”
If they keep going with it, then suggest that you need to make that decision. Are you going to be able to close on the property? Can you convince them to come down in price to account for your closing costs? That’s how I answer it. Most of the time, they’re good. They’re like, “I get it. It’s a legal language.” You lose them at a certain point but they realize it’s nothing to be afraid of. They were reiterating what their attorney said.
Next round of questions, what do you do when sellers ask questions like, “Can you close the escrow sooner or can you close later? Can you close on the date that we move?” The way that I answer sellers, the first one is, “Can you close sooner?” I say, “I can close about as fast as anybody can close.” It depends on how quickly you can clear up your title.
Seller Objections: As an investor, you’re not going to live in the property anyway. You can manipulate your numbers to account for losing a fixture.
If your title has liens, a loan on the property or a mortgage, we need to clear. Maybe there are multiple owners and we have to get documents signed or you need to provide documents to our escrow company. I don’t have any control over that. I like to be conservative. I like to give you a realistic idea of the closing date. That’s the date I put on this contract because I want to under-promise but over-deliver.
I like to ask you, “When do you need this property closed by?” Sometimes it’s only 30 days. That’s no big deal. I can work with that. Some sellers might say, “I need it to close in five days.” We might have a problem. I would answer back. I will say, “I don’t think anybody can close this deal in five days.” Usually, that will get them to explain why do they need to close in five days. Most of the time, you can work with this and the seller has unrealistic expectations. Once they find out that nobody can close in five minutes, they back off on this suggestion.
I also love to offer that we can close on the date you choose. If you want to close the day you move, we can make that happen. That’s a benefit to selling to an investor because you can’t offer that benefit if you were selling to a traditional retail buyer on the market with a realtor. That’s not going to work. Your benefit as an investor is that you can close on the date that they choose. Depending on that, they’re not choosing five minutes from this phone call. Now, sometimes the seller says, “The problem is I need you to close because I need that money to then move and go into my next place.”
I asked the seller, I go, “How much money do you need?” I get those needs. If it is a large amount of money, then usually, we’ll work out a deal. We’ll close escrow but they can lease the property back for two weeks. That is a way that I work with the seller in that need. Again, that’s something that we, investors, can do and retail buyers can’t. That’s why selling with an investor is the seller’s best option. Sometimes the seller needs $1,500 to hire a mover.
If the seller has an objection or a question, you need to find a way to make it work where it’s a win-win for both of you.
In that case, I say, “As soon as this property passes inspection, I’m going to release a nonrefundable earnest money deposit to you for $1,500. I am going to make sure that EMD is secured to the property so that way you can’t just take the money and not sell the house to us but this is going to give you the money to be able to move out, hire your mover and we can have no rush on the escrow.” I came up with some solutions and that’s all you have to do. This business is overcoming objections, finding out what the seller’s objection is and coming up with a solution.
That’s what you need to focus on is how can you solve the seller’s problem? Another example is the seller might ask you, “Can I take this fixture or this thing off the property?” As an investor, you’re not going to live in the property anyway. You can manipulate your numbers to account for losing a fixture. When you make the offer to the seller and the seller says, “Yes. I like this price except I want to take all the appliances.” Now, you tell the seller, “That’s going to cost me X amount of dollars. I’m going to have to back that out of my offer.” You might say, “That works,” because it’s a good deal either way.
These are ways again, the seller has an objection or a question and you need to find a way to make it work where it’s a win-win for both of you folks. Let’s get to the next question. What if the seller says that they don’t want to have to disclose anything about the property? Maybe your contract says something that the seller has to disclose material defects. The seller crosses it out and says, “No, I’m not going to do that. This is an as-is sale. I don’t need to show you anything. I don’t need to let you inspect. I don’t need to disclose anything.” This is where I tell the seller, “This language is in most contracts.” What I’m saying here is you only need to disclose what you know about.
If you don’t know that the property has foundation issues because you never lived there. Maybe it was an investment property for you. You do not need to disclose that because you don’t know. I’m simply saying any known material defects need to be disclosed. Let me tell you. I don’t know if you know this but it’s illegal anyway. If you didn’t disclose something that you knew about and say later, “I find out that there’s a ton of foundation damage and you had to have known because you replaced the carpet.” I could come back and make that claim against you. Legally, I would have a leg to stand on.
Seller Objections: It is important that you have a good open line of communication and the seller is being honest with you about any defects to the property.
This language in my contract saying that you need to disclose anything that’s known is me protecting you from that accidentally happening. I’m not saying you would ever do that but this is why I have it there. That is a way to overcome that objection, where the seller starts wanting to cross things out of your contract that suggests that they need to tell you that they have damage to their home that they know about. It is important that you have a good open line of communication and the seller is being honest with you about any defects to the property.
Hopefully, you got a lot out of these answers. I might’ve put some ideas in your head on how to answer common seller objections. If you want to learn more about wholesaling, make sure you check out www.VirtualInvestingMastery.com. I would love to help you in your journey. Thank you so much and I will see you next time.
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About Lauren Hardy
Lauren Hardy is a Real Estate coach and virtual Real Estate investor, investing in many different markets around the country. With her “people first” approach to the Real Estate business, Lauren was a perfect fit to join the Wholesaling Inc team of coaches. Lauren will teach you her entire process of doing Wholesale real estate deals remotely from the comfort of your home. You’ll be able to do deals in any market in the country – so you can pick the most lucrative markets to go into, regardless of where you live, and generate massive profits quickly.